Heavy Earth Resources Announces Operational Update for Colombia
Heavy Earth Resources Announces Operational Update for Colombia
SAN FRANCISCO--(BUSINESS WIRE)-- Heavy Earth Resources, Inc. ("Heavy Earth" or the "Company") (OTCQB: HEVI), an oil and gas exploration and production company focused on Central and South America, today announced it is preparing to commence its 2013-14 exploration and production work plan.
The work plan's focus is to commence production from the Morichito-5 (M-5) discovery well, support the long-term development of the Morichito block and fulfill the obligations required for a two-year E&P Contract extension from the Colombian Agencia Nacional de Hidrocarburos (ANH).
Located within producing trends of the prolific Llanos Basin, Heavy Earth's Morichito block is surrounded by analog production including Pacific Rubiales Energy's productive Cachicamo and Cravoviejo fields, CEPSA's 20,000 bopd Caracara field and Hocol, S.A.'s 20,000 bopd Guarrojo field.
Colombia Operational Update
- Acquisitions of production equipment and facilities to commence expected production of the M-5 discovery well in Q1 2013;
- Completion of topographical surveys for the commencement of access road construction and development in the southern portion of the Morichito block;
- Commencement of negotiations with drilling service providers to complete the M-5 work-over well and M-5B sidetrack well;
- Expected to be awarded a two-year extension upon the fulfillment of all six phases of the E&P Contract, upon delivery of the recently acquired and interpreted 150 square kilometers of 3D seismic data on the Morichito block. Delivery to the ANH of the seismic data must be completed in Q1 2013 to maintain the Company's interest in the Morichito Block and once delivered it will fulfill the requirements of the E&P Contract's "final phase";
- Completion of the final processing, interpretation of the 3D seismic data acquired during the 2012 work program and complete a development plan for the M-5 field and Morichito block in Q1 2013; and
- Commencement of testing in Q1 2013 to prove production and reserves from the Noelia #1 well in the La Maye block originally drilled in September 2009 where activities were suspended due to weather and flooding.
Establishing a Long-Term Development and Exploration Plan
New 3D seismic data has identified high-impact exploration leads in the Carbonera, Mirador, Gacheta and Ubaque intervals on the Morichito Block that are on the same order of magnitude as those in nearby or adjacent fields. Weather permitting, and subject to financing and available service company resources, the Company's 2013-14 work plan anticipates a significant increase in drilling activity focusing on both development and exploration to realize the potential of the existing commercial discovery at Morichito 5 and to test new exploration targets.
Heavy Earth's Chief Executive Officer, Grant Draper, said, "This is an exciting period for the Company, and will certainly be a transition point with the realization of possible production from the M-5 discovery well, drilling a sidetrack re-entry well and confirmation of the reserves and resources potential on the La Maye block."
Morichito-5 Well Discovery
Originally drilled to a total depth of 6,160 feet in March 2010, the M-5 well discovery was re-entered and tested in August 2011 with flow rates of up to 700 barrels of 22.5 degrees API crude oil per day utilizing a hydraulic jet pump from perforations in the lower Carbonera C7 zone at 5900-5902 feet. The Company intends to bring this well into production in the first half of 2013 thereby meeting one of the requirements for maintaining its interest in the Morichito Block as mandated by the ANH.
La Maye Noelia-1 Well
Originally drilled over 31 days to a total depth of 3,341 feet into basement in September 2009, the Noelia-1 well, located on the La Maye block in the Lower Magdalena Valley Basin Colombia, encountered several oil and gas shows and was cased for future testing. Improving weather conditions should allow for the commencement of testing this well to evaluate the ability of the hydrocarbon system to produce both gas and oil from potentially multiple reservoirs and evaluate which play types exist in the La Maye block.
The La Maye block lies along the southeastern flank of the Plato sub-basin of the Lower Magdalena Valley Basin and along the eastern edge of the Cicucco Arch which extends from the Cicucco Field 25 kms to the west of the block. The Company holds a 25% participating interest in the La Maye block.
About Heavy Earth Resources, Inc.
Heavy Earth Resources, Inc. is an oil and gas exploration, development and production company focused on under-explored regions and basins with proven petroleum geology fundamentals in Central and South America. The Company holds a significant drill ready, lower risk, prospect inventory in the Llanos and Lower Magdalena Basins. Heavy Earth Resources, Inc.'s shares trade on the OTCQB under the symbol HEVI. For more details on the Company, please visit www.heavyearthresources.com.
This press release contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events and the Company's growth and business strategy.Words such as "expects," "will," "intends," "plans," "believes," "anticipates," "hopes," "estimates," or the negative thereof, and other variations on such words and similar expressions are intended to identify forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company. Actual results may differ materially from those expressed or implied by such forward-looking statements.
Factors that could cause actual results to differ materially include, but are not limited to, risks associated with drilling and production programs on the Morichito and La Maye Blocks resulting from geological, technical, drilling, seismic and other unforeseen problems; unexpected results of exploration and development drilling and related activities on the Morichito and La Maye Blocks; continued availability of capital and financing to fund exploration and development drilling activities; increases in operating costs; availability of skilled personnel; unpredictable weather conditions; the impact of political and economic instability in Colombia; the ability to obtain required approvals of regulatory authorities in Colombia; senior management's general inexperience in oil and gas operations in Colombia;members of senior management not being based in Colombia, and other factors listed from time to time in the Company's filings with the Securities and Exchange Commission. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with respect thereto or any change in events, conditions or circumstances on which any such statement is based.
Cautionary Note to U.S. Investors - The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only reserves that comply with the definitions presented at Rule 4-10(a) of Regulation S-X. We use certain terms in this press release that the SEC's guidelines strictly prohibit us from including in filings with the SEC. Examples of such disclosures would be statements regarding "probable," "possible," "recoverable," or "prospective" "reserves," and "resources" among others. U.S. Investors are urged to consider closely the disclosures in our Registration Statement on Form S-1 filed on October 12, 2012, and other filings available atwww.sec.govor from us at Heavy Earth Resources, Inc., 625 Second Street, Suite 280, San Francisco, California 94107.
KEYWORDS: United States North America South America Colombia California
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